DAO Maker Hack Sees $7M Stolen From Thousands of Users in Latest DeFi Heist

Over 5,000 cryptocurrency accounts are reported to have been hacked in a large cyberattack costing around $7 million.

The hack targeted DAO Maker, a crowdfunding platform that helps create funding frameworks for startup companies, on Wednesday night EDT.

Colin Wu, a Chinese blockchain journalist, announced the news on Twitter, citing a Chinese crypto blogger called Big Orange.

The hack was confirmed by DAO Maker CEO Christoph Zaknun in a statement, who said the situation had been "taken care of."

Zaknun said the $7 million total had been stolen from 5,251 users with the average user losing $1,250 before the exploitation was tracked.

He added: "We decisively moved the unaffected funds to a brand-new secure wallet, while users are still able to withdraw their funds unimpeded, should they choose to do so."

The DAO Maker team have contacted Cipher Blade, a blockchain forensics organization, to help them return the stolen funds.

Zaknun wrote: "Over the next five days, DAO Maker will devise a set of solutions to alleviate the incurred damages and work in full force to bring the hacker to justice through the massive forensics investigation undertaken.

"All affected users will be informed via email and on their DAO log-in portal. We want to thank our past and current clients who have been exceedingly supportive during this turbulent time."

The type of cryptocurrency that was stolen is called USDC—a token known as a stablecoin because its value is pegged to that of the U.S. dollar.

The tokens were reportedly replaced by another type of cryptocurrency known as Ethereum.

The reason the tokens had to be swapped out instead of removed is that USDC assets can be frozen, BitcoinInsider reports.

The term DAO refers to a decentralized autonomous organization, which is essentially an automatic blockchain protocol that works without people having to get involved. The benefits of a DAO is that it can lower management cost of a network because no third parties are needed, according to CoinMarketCap.

The DAO Maker hack is not the first crypto cyberattack to have taken place in recent days.

Earlier this week, the Poly Network protocol, which is used for swapping cryptocurrency, also announced it had been hacked resulting in the loss of $611 million in Ethereum, tokens on the Binance Smart Chain, and USDC.

On Thursday, Poly Network said $342 million of the stolen assets had been returned, and the remaining amount lost amounted to $268 million worth of Ethereum.

Poly Network had said in a Twitter thread on Tuesday: "We will take legal actions and we urge the hackers to return the assets."

Person typing on keyboard
A stock image shows a person typing on a keyboard in the dark. The Dao Maker hack has resulted in $7 million being stolen. Chainarong Prasertthai/Getty